In this blog, we're going to teach you everything you need to know about personal bookkeeping in under 400
Well, OK, not really. There's a reason we had to go to school for way too long to learn this stuff. However, what we are going to offer are some insider tips on how to make sure your personal bookkeeping is effective, and can be a tool to help your business rather than a stumbling block.
Record everything as quickly as is prudent. Don't put off entering receipts until the end of the week or the end of the month. We're not saying you have to update your books the very moment you make a deposit at the bank, but do it sooner rather than later.
Make bookkeeping a regular habit. If you're doing your own books, try setting aside a few minutes every day to update your records. If you make it a daily occurrence, you're less likely to forget or start procrastinating. Receipts pile up if they're not taken care of quickly, but it's easy on a day-to-day basis.
Keep your personal and business ledgers totally separate. So many people get into trouble when they freely mix their personal bookkeeping with their business. Even if you're a one-person operation,
keep separate books. It'll help you on tax day, and it'll help you keep a clearer idea of where your finances stand.
Use consistent categories. You need categories to keep your finances straight, things like “Office Supplies” and “Computer Expenses.” Figure out what you're going to call them ahead of time and stick to that. It'll prevent confusion when you're looking at your books months or years later.
Budget major expenses ahead of time. If you know you'll be needing a new tablet within a year, go ahead and pencil that into the budget. Don't spend it unless a truly dire crisis pops up. That way the money will be there when it's needed, rather than being an unplanned and unexpected expense.
Get software. It's the year 2012, for crying out loud. There's just no reason to be doing this stuff on paper any more unless you're a masochist. A good piece of software will make your bookkeeping and financial tracking far easier.
Finally, as a parting question, do you have any tricks that have helped you with your personal bookkeeping? We'd love to hear any tips you might have.